In a brief statement on the company’s blog, Day One, Amazon (NASDAQ: AMZN) announced COVID-19-related bonus payments totaling $500 million.
The payments to “front-line employees and partners” are as follows:
- Full-time Amazon and Whole Foods Market employees and delivery service partner drivers will receive $500 while their part-time counterparts will get $250.
- All “leaders” in front-line positions at Amazon and Whole Foods Market will receive $1,000.
- Delivery service partner owners will receive $3,000.
- Ride-sharing last mile drivers with Amazon Flex will receive $150 if they worked more than 10 hours in June.
“Our front-line operations teams have been on an incredible journey over the last few months, and we want to show our appreciation with a special one-time ‘Thank You’ bonus totaling over $500 million,” stated Dave Clark, senior vice president of worldwide operations.
In a separate blog, the company said that it has funded approximately $4 billion in COVID-19 initiatives.
Amazon faced pushback in its handling of worker safety early on in the pandemic as employees at various facilities became ill with some succumbing to the virus.
The last week has been a busy one for the company. Amazon kicked the week off with the launch of a $2 billion Climate Pledge Fund aimed at reducing greenhouse gas emissions. Amazon was linked as the potential suitor of struggling retailers and mentioned in several new real estate transactions including a one-million-square foot property in New York. The company capped the week with several reports confirming it as the buyer of self-driving technology startup Zoox in a $1.2 billion deal.
Where does it find the money?
Amazon generates significant cash flow from its nearly $300 billion in annual net sales. At the end of first quarter 2020, Amazon reported more than $24 billion in free cash flow on a trailing 12 month’s basis. Excluding equipment finance leases and principal repayments of finance leases and other financing obligations, Amazon generates nearly $12 billion in free cash flow annually.
The company spent $11.3 billion in cash capital expenditures (capex) during 2019, and $12.7 billion in 2018, primarily on capacity in its fulfillment operations and technology infrastructure for its cloud computing services unit, Amazon Web Services. The company spent nearly half that amount in the first quarter of 2020 alone, recording $5.4 billion in cash capex for similar investments. Amazon ended the quarter with more than $27 billion in cash and $22 billion in marketable securities.
On the bonus payments Clark concluded, “Again, my thanks and gratitude for the truly remarkable commitment to customers you have shown throughout this journey. I have never been more proud of our teams.”
Shares of AMZN are basically flat in midday trading.
Click for more FreightWaves articles by Todd Maiden.
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